Business Valuation

Valuing a small business in the UK can involve various methods. Asset-based valuation calculates net asset value by subtracting liabilities. Earnings multiples, such as P/E and EBITDA ratios, provide insight into market value. Discounted Cash Flow (DCF) considers future cash flows, using a discount rate. Comparable Company Analysis (CCA) compares the business to similar ones. Market capitalisation is relevant for publicly traded companies. Industry-specific methods may apply. A comprehensive approach, combining these methods, is crucial for accurate valuation.

You must also consider the situation of the business and its marketability. There are more businesses for sale in the UK and not enough buyers. 98% of UK businesses stay for sale for more than 12 months and only 8% listed with brokers ever get sold. Supply and demand always has an effect on the valuations.

In saying that an attractive company at a reasonable prices are always in demand and can be snapped up really quickly. Professional expertise is often recommended to ensure a reliable and informed assessment of a small business's worth in the UK.